Note from Michael Salvatore, Editor, TradeSmith Daily: I have a brief, important message for you to read before today’s Daily…
The U.S. election is one week away. Most people have already decided who they’ll vote for… but few are prepared for what could happen to the stock market in the days and even weeks after Election Day.
In more ways than one, this cycle is unlike any other. It’s not just about Trump vs. Harris, or a likely dispute of the results from either side…
It’s about the massive potential for volatility to strike the stock market ahead of, during, and immediately after the election.
If you want to be prepared, I’d suggest watching Louis Navellier and Charles Sizemore’s webinar airing today at 7 p.m. Eastern that lays out the case for a big stock slide starting next week.
Once you do, you’ll know exactly what to do during the fallout… and why it could prove one of the biggest opportunities since the “pandemic panic” crash of March 2020.
Learn more and save your spot here while they’re still available. By clicking the link, your email address will automatically be added to the Day After Summit RSVP list. |
What We See Before Small-Cap AI Stocks Quadruple BY LUCAS DOWNEY, CONTRIBUTING EDITOR, TRADESMITH DAILY Let’s be honest: There’s a ton of hyped-up fluff in the AI space. Everyone is jumping on the bandwagon. Turns out there’s a way to sniff out the true contenders from the pretenders… By trying to understand what “smart money” investors are buying, we can extract a huge edge when it comes to stock picking. After all, when large money managers with endless research budgets decide to plow into a new under-the-radar company… odds are they believe the company has the ability to do one super-important thing well… …grow their earnings. That’s right. Set all the exciting tech and big promises aside. If you’re able to lock-in on a company where the bottom line is set to explode past analyst expectations, you stand to make a huge profit. Today, we’ll unpack an incredible AI name that I’ve been following for over a year. We’ll uncover the massive earnings growth, and as a bonus I’ll show you how you can spot these outliers BEFORE they take off. Hardware Player Celestica (CLS) is Benefiting from AI Demand As earnings season kicks off, stocks are either bumping or dumping depending on the report. One name surging to record highs is hardware player Celestica (CLS). If you’re unfamiliar with this up-and-comer, they provide design, manufacture, and supply-chain solutions in the technology/electronics realm. By Michael Salvatore, Editor, TradeSmith Daily This $8 billion dollar company saw its shares surge double-digits on Oct. 24 after reporting a solid earnings beat: - Third-quarter revenues clocked in at $2.50 billion, easily surpassing Wall Street estimates of $2.41 billion.
- Even more impressive was the $1.04 earnings per share (EPS) versus estimates of $0.94.
- Plus, Celestica gave solid full-year company guidance of $3.85 per share, shattering their own prior guidance of $3.62.
Anytime you beat and raise, Wall Street gets excited. As you can see, CLS shares clocked a new high on the news. Also note how strong this company has been performing for the past year and a half. The stock started to ramp right around July 2023: 
As an investor, you want to hop onto the next hot trend right as it’s getting started. But you want to do it with the right companies. That means focus on earnings growth. With a stock going from $15 to $69, clearly earnings must be expanding at a breakneck pace. And they have been for Celestica. In fact, analysts have had trouble keeping up with Celestica’s trajectory. Check this out. From July 11, 2023, the best and brightest on Wall Street estimated CLS’s 2024 EPS to shake out at $2.22. Fast forward to May 23, 2024, and those estimates jumped to $3.63. As of Friday, those same analysts now project earnings to surge to $3.83: 
As for Celestica’s fundamentals overall, it gets a high score of 66.7 from Jason Bodner’s Quantum Edge system – and an even better technical score of 82.4 – for an overall Quantum Score of 75.9. That’s right in the buy zone: 
Folks, I can’t emphasize this enough. If you want to find the next monster winning name, you have to scan for earnings growth. Better yet, focus on the handful of names accelerating their earnings in such a way that it blows away analyst expectations. They’re not easy to find. It’s the small, under-the-radar companies like Celestica that have that profile. And before you think this past 18-month view is an anomaly, check out the annual revenues and EPS figures since 2020. Incredibly, revenues are expected to grow from $5.75 billion in 2020 to $10.53 billion in 2025. Even more impressive is the EPS growth projection over the same period – $0.47 to $4.40: 
So, we know why CLS started ramping higher last summer. And we know its revenues and profits have been growing for years. Let’s now showcase how you can find these outliers just as they’re beginning their climb. Earlier I spoke on the power of following smart investors. My colleague Jason Bodner and I spent years on Wall Street trading desks handling countless orders for big institutional players. What we learned was simple: Big investors not only buy great companies… they also leave “footprints” when they trade. Understanding unusual trading activity is a huge edge and can alert you to when large money managers are getting involved in a stock. We created a Big Money system so we’ll know when a company is under heavy buying pressure as well as whether it scores well fundamentally (which CLS also does, including the expanding earnings and revenue). Those Big Money signals can be seen below in the chart of CLS. Each green bar indicates when CLS shares were rising on unusual trading volumes. Out of nowhere on July 11, 2023, the first inflow signal was spotted. And it didn’t stop – multiple signals triggered soon after, too: 
This is the proof that you can isolate the best growth stocks out there just as they start to break out. And you do it by following unusually strong buying pressure. I firmly believe this heavy buy pressure was due to the powerful earnings growth that few analysts saw at the time. Your first call to action is keep Celestica on your radar. But the better, even more important call is to prepare for these types of setups in the future by having a window into these unusual buy signals. Jason Bodner’s Quantum Edge Pro is geared to find these types of opportunities. When you subscribe you can look up the Quantum Score of just about any stock right on your TradeSmith Finance dashboard, plus Jason provides weekly updates and trade alerts for a complete model portfolio of small-cap names with powerful institutional sponsorship. Keep in mind, Celestica is already in Jason’s model portfolio and is above the buy-up-to price. But don’t let that discourage you – let it empower you. This is the same system that uncovered eight Big Money buy signals in Super Micro Computer (SMCI) in August 2022, to give you another example. SMCI also made Jason’s Top 10 stock list four times that summer (another Quantum Edge Pro perk). And data reveals these outliers. With November kicking off a seasonally bullish time of year, now’s the time to hunt for the next big winning AI play with Quantum Edge Pro. Regards, Lucas Downey
Contributing Editor, TradeSmith Daily | 
No comments:
Post a Comment